Smartphone subscribers are increasingly paying full price for their phones.

Bloomberg

The best wireless deals from the largest carriers may still require you to sign a contract.

After years of trying to shed subsidies, carriers are being successful in getting people to adopt plans that do just that. But individual subscribers at AT&T and Verizon Wireless can still save more money over the life of a two year contract when compared to the plans that require you to pay full price for your device, typically through an installment plan.

Traditional plans have buyers pay part of the price up front—say $200—then pay off the rest through what is essentially a charge bundled into their monthly bill. These plans have enabled the proliferation of high-end devices like the base model iPhone, which actually has a retail price of about $650.

Under a traditional contract with Verizon Wireless on a plan that includes 2 gigabytes of wireless data, you would pay $200 and an activation fee of $35 for the phone upfront and then $75 a month. Over two years, that comes to about $2,035. On the no contract version, you pay $65 a month for service, with no activation fee, plus about $27 a month over the period to pay off the iPhone, bringing your total to about $2,210 – $175 more.

Verizon advertises that its no-contract plans save money for consumers. That’s true for the monthly service fee, but not for the total cost.

A spokeswoman said the Verizon no-subsidy plan offers flexibility to customers seeking to upgrade more frequently, but concedes that there is “value” in the contract plans.

The equation is similar at AT&T, though the price difference isn’t as large. Customers getting an iPhone on contract will pay $200 up front, plus a $36 activation fee, and then $80 a month for two years for two gigabytes of data, a total of $2,156. When buying an unsubsidized phone, the service fee is $65 a month, with no activation fee, and a device payment of $32.50 for 20 months, although customers can also pay it off over 26 months. That brings the two-year total to $2,210, or $54 more than signing a contract.

AT&T and Verizon have each adjusted earlier versions of their no-subsidy plans to make them a better deal for subscribers. And the no-subsidy plans offer faster upgrades and no money down for new phones. But they still are going to cost you more over time.

The carrier says its unsubsidized plans save customers more over contract-plan options when more data and devices are added.